Texas Nonsubscriber Occupational Injury Program
Coverage built specifically for Texas employers who opt out of the state workers' comp system.
This is an estimate, not a bound policy — a licensed VAB producer confirms final terms before coverage starts. Sgt. Savings can answer questions but can't quote, bind, or guarantee coverage.
Texas is unique in letting employers opt out of the state workers' compensation system entirely — becoming a 'nonsubscriber.' This program is built specifically for those employers: it reimburses benefits paid under the employer's own occupational-injury benefit plan, and separately covers negligence-based bodily injury claims employees can bring under Texas Labor Code §406.033 once an employer has opted out. It's explicitly not workers' comp insurance — it's the coverage built for the alternative path Texas law allows.
Who This Is Really For
The ideal buyer.
The ideal buyer is a Texas employer who has already opted out of the state workers' compensation system, or is actively weighing whether to, usually because they've run the numbers and believe a self-designed occupational-injury benefit plan will serve their workforce better or cost less than staying in the state system. These buyers tend to be established Texas businesses with the administrative capacity to run their own ERISA benefit plan — nonsubscriber status isn't a fit for a business that wants to set it and forget it, since the employer takes on real responsibility for both the benefit plan and the negligence exposure that comes with opting out. What sends this buyer looking for coverage right now is usually the moment they understand what §406.033 actually means in practice: without workers' comp's usual legal protections, an injured employee can sue them directly for negligence, and that exposure needs its own answer, not just the benefit plan. What makes this program the right fit instead of a generic employer liability policy is that it's built around the specific two-part reality of Texas nonsubscriber status — the benefit plan and the negligence exposure — rather than treating it as ordinary employer liability.
- Texas employers who have opted out of the state workers' compensation system
- Texas businesses evaluating whether nonsubscriber status makes sense and want the coverage lined up first
- Employers running their own ERISA occupational-injury benefit plan for employees
- Texas companies concerned about §406.033 negligence exposure once workers' comp's usual legal protections no longer apply
What It Covers
Coverage, broken down.
Coverage A — Plan benefit reimbursement
Reimburses or pays plan benefits under the employer's own ERISA occupational-injury benefit plan for a covered injury to an employee.
Coverage B — Labor Code §406.033 negligence defense
Pays loss and defense costs for a bodily-injury claim an employee brings against the employer under Texas Labor Code §406.033, the negligence claim available specifically because the employer opted out of workers' comp.
Illustrative Scenario — How This Coverage Responds
Illustrative scenario — a Texas nonsubscriber employee is injured and sues under the Labor Code
Imagine a Texas employer has opted out of the state workers' comp system and instead maintains its own ERISA occupational-injury benefit plan alongside this coverage. An employee is injured on the job. The employer's plan pays benefits under Coverage A, reimbursed through the policy. The employee separately sues the employer for negligence under Texas Labor Code §406.033 — a claim only available because the employer is a nonsubscriber. Coverage B pays the defense costs and any resulting loss from that negligence claim. This is a hypothetical walkthrough to illustrate how the coverage responds — not a description of an actual claim.
Illustrative example for education only — not a claim outcome or a promise of payment. Every claim depends on the actual policy issued and its terms.
More Than One Way In
More scenarios.
Real coverage doesn't fit one story. Here's who else this shows up for.
The manufacturer evaluating nonsubscriber status
A Texas manufacturer currently in the state workers' comp system runs a cost analysis and concludes that becoming a nonsubscriber with its own ERISA benefit plan could better serve its workforce and its bottom line. Before making the switch, the company lines up this coverage so both halves of the new exposure — plan benefit funding and §406.033 negligence defense — are addressed from day one of nonsubscriber status.
The construction firm facing a §406.033 claim
A Texas construction firm that opted out of workers' comp years ago has an employee injured on a job site file a negligence claim under §406.033, alleging the firm failed to provide a safe workplace. Coverage B funds the defense costs and any resulting compensation obligation, protecting the firm from the direct legal exposure that comes with nonsubscriber status.
The employer transitioning back to subscriber status
A Texas employer that had been a nonsubscriber decides market conditions favor rejoining the state workers' comp system. Because this program's coverage is designed around active nonsubscriber status, the employer works with their VAB team to align the transition date so there's no gap between when this coverage's design stops fitting and when workers' comp coverage actually takes effect.
Know The Gaps
What this doesn't cover.
Every policy has limits. Knowing them before you buy is how you avoid a denied claim later.
Injuries during any period the employer isn't actually a nonsubscriber
This coverage only applies while the employer maintains active nonsubscriber status — if the business has workers' comp in force for a period, injuries during that period fall outside this policy's design.
Exemplary or punitive damages, fines, and penalties
Punitive-type damages and regulatory fines/penalties are excluded across the board — coverage responds to the underlying negligence loss and defense costs, not punitive add-ons.
Intentional injury by the employer
Deliberately caused harm is never insurable — a standard exclusion, not specific to this program.
Injuries to non-employees or independent contractors
This program is built around the employer-employee relationship under Texas nonsubscriber law — independent contractors need separate coverage like occupational accident insurance instead.
Federal compensation-law claims (FELA, Longshore, Jones Act)
Employees covered under a federal compensation scheme instead of Texas state law fall outside this program's scope entirely — those claims are governed by different federal statutes.
Behind The Quote
What goes into the decision.
What actually moves your price and your approval — no black box.
Active nonsubscriber status
Coverage is built entirely around the employer actually maintaining nonsubscriber status under Texas Labor Code Chapter 406 — an employer that's back in the workers' comp system, even temporarily, needs coverage aligned to that different legal position instead.
The employer's own ERISA benefit plan design
Since Coverage A reimburses benefits paid under the employer's own plan, how that plan is structured — what it pays, what triggers a benefit — directly shapes what the coverage is actually reimbursing.
Workplace safety practices and injury history
Because Coverage B responds to negligence claims specifically, an employer's actual safety record and practices matter both for how often that exposure gets triggered and how defensible the employer's position is when it does.
Where employees are principally employed
The program covers only employees principally employed in Texas, so a Texas employer with workers based in other states needs to confirm which employees this program actually protects and which need separate coverage.
Whether employees fall under a federal compensation scheme instead
Employees covered under FELA, the Longshore Act, or the Jones Act fall outside this program's scope entirely, so an employer with any workforce touching those federal categories needs to identify that population separately.
Let's get you covered.
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Availability
Available only in Texas, and only for employers that maintain active nonsubscriber status under Texas Labor Code Chapter 406.
Questions, answered straight
No jargon on texas nonsubscriber occupational injury program — just what you're actually asking.
No — the program explicitly states it is not a workers' compensation policy. It's built for the specific legal position a Texas nonsubscriber employer is in, which is fundamentally different from carrying workers' comp.
Coverage under this program is designed around active nonsubscriber status — injuries during a period when workers' comp is back in force fall outside how this program is built to respond, so you'd want to align your coverage with your subscriber status at any given time.
No — this program is scoped to the employer-employee relationship under Texas nonsubscriber law specifically. Contractors need separate coverage, like an occupational accident policy.
It's the negligence-based bodily injury claim Texas law allows an employee to bring against a nonsubscriber employer — normally, workers' comp gives employers certain legal protections against employee lawsuits, and opting out removes some of those protections, which is what Coverage B is built to address.
No — this program is Texas-only by design, built around Texas Labor Code Chapter 406's specific nonsubscriber framework, and only covers employees principally employed in Texas.
Beyond This Coverage
What people in your situation also need.
Group Benefits
An employer running its own ERISA occupational-injury benefit plan as a nonsubscriber is already deep in benefit-plan design, making group benefits support a natural adjacent conversation.
ExploreHR & Payroll (PEO)
Administering nonsubscriber status well takes real HR infrastructure — PEO support can help a Texas employer manage the plan and compliance side that comes with opting out of workers' comp.
ExploreBusiness Banking
A Texas employer managing its own benefit plan payouts alongside regular operations benefits from business banking built for that added complexity.
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Learn moreReady to talk it through?
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Insurance products described on this page are marketed by The Veteran Alliance, a licensed insurance producer, and underwritten by one or more separately licensed insurance companies, which may include Corgi Insurance Company and its affiliates. The insurer that actually underwrites your policy, its licensing status in your state, and any state-required notices will be identified in your quote and policy documents. Coverage, limits, eligibility, and pricing are determined by the underwriting insurer, may vary by state, and may change. Nothing on this page is a quote, an offer of insurance, a binder, or a guarantee of coverage — coverage takes effect only when a policy is issued.